Exercise 21-14 Danner Company expects to have a cash balance of $54,585 on Janua

Question

Exercise 21-14 Danner Company expects to have a cash balance of $54,585 on January 1, 2017. Relevant monthly budget data for the first 2 months of 2017 are as follows. Collections from customers: January $103,105, February $181,950 Payments for direct materials: January $60,650, February $90,975 Direct labor: January $36,390, February $54,585. Wages are paid in the month they are incurred Manufacturing overhead: January $25,473, February $30,325. These costs include depreciation of $1,819 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $18,195, February $24,260. These costs are exclusive of depreciation. They are paid as incurred Sales of marketable securities in January are expected to realize $14,556 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $30,325. The company wants to maintain a minimum monthly cash balance of $24,260 Prepare a cash budget for January and February. (Do not leave any answer field blank. Enter O for amounts)

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DANEER COMPANY

Cash Budget

DISCRIPTION JANUARY FEBRUARY Beginning Cash Balance $54,585 $63,682 Add:- Budgeted Cash Sales $14,556 0 Add:- Collections from Customers $103,105 $181,950 Total Cash Available for Use $172,246 $245,632 Less:- Cash Disbursements Direct Material $60,650 $90,975 Direct Labour $36,390 $54,585 Manufacturing Overhead $23,654 $28,506 Selling & Administrative Expenses $18,195 $24,260 Total Disbursements $138,889 $198,326 Cash Surplus $33,357 $47,306 Add :- Financing Borrowing $30,325 0 Budgeted Ending Cash Balance $63,682 $47,306

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